In the Cold Light of Day

"Ian F is a SpikeTrade Member. He sent this contribution from the UK" - Alex

Here are my review notes in the 'cold light of day' from yesterday:

These 2 first trades are examples of what NOT to do - but first some background.
I returned from a meeting after the markets had opened. I immediately saw that the system had triggered 2 trades.

What happened next is something I need to be extremely cautious of in the future.
I immediately thought that because the system had triggered then I needed to be in the trade (albeit with a reduced amount of shares because I was late and the stock had run) and bought the other on the pull back at the buy price. Because I felt 'rushed' in making these trades I really ignored what was going on - if I had sat and analysed what was happening I would have realised that I was realistically too late to be entering these trades. I had thought that August was such a quiet month I was convinced that I needed to be 'in'.

What I was doing was trading on my emotions - I was not giving myself time to digest where the market was and the implications of my hasty decision making process.
I thought because the system had triggered I had to be in - where as in reality my mind had not had time to adjust to such a rapid changing environment. I had not written these trades into my 'manual' trading log because I had been late from my meeting - this 'manual' log is my way of keeping me 'on track' - it enables me to know what my expectations for a trade are. If I have not got that how can I trade?

What can I learn from this?
I must incorporate some sort of 'mental filter system' that ensures that if I do not have the time to diligently write down the potential trades that may trigger - whether that be the WPT or my own system (which is very similar - I guess it mainly differs in the scan for trades process and I also look at shorts) then I really have no right to enter a trade. NO NOTES = NO TRADES.
From now on this will be part of my trading strategy and it will be up to me to control my discipline.

At the moment I am taking time out to type this into my Screen Trading Log as I feel this is a very important stage of my trading process. If I ignored this I might as well not trade - it is fundamental for me to feel calm and collected in what I am doing before entering a trade.
The market has told me (again) that it is the boss, if I want to work with the boss I have to follow my strategy and system. Just like working for a boss, sometimes we get it wrong. If I was working for someone else and I got it wrong, they would want answers and he/she would want to know that I could learn from mistakes. If I am my own boss like in trading then I HAVE to acknowledge my mistakes and do something about it - this is my attempt to improve my trading in the future - I owe it to myself.

Only last week I was telling my partner how much calmer I felt because I felt in control by writing my log diligently and following carefully what I was supposed to be doing. I also owe it to her to constantly be aware of my successes and failures.

This was not about a failure in the system, this was about a failure in my discipline.